New man Eichel 'will not rock boat'

Hans Eichel, who is expected to succeed Oskar Lafontaine as Germany's Finance Minister, has been greeted with cautious approval in Frankfurt.

"Eichel was sympathetic to our aims, understood the issues, and got things done for us. The recent tax reduction on funds is largely thanks to him," said Rolf Passow, chief executive of the Dresdner Bank funds group.

Eichel will also rock the boat less than his unpopular predecessor, added Rüdiger von Rosen, head of the influential German equities lobby group. He is much more down- to- earth than Lafontaine and would never be heard talking about target zones or putting pressure on central banks. The new Finance Minister was a leading architect of Lafontaine's tax reforms, which suggests he will continue on the same track.

However, the outgoing Minister President in the State of Hesse, who was recently defeated in regional elections, has a more pragmatic reputation.

With Lafontaine gone, business leaders are hoping the unpopular tax reform will be revised at the last moment.

Von Rosen said his main demand would be for a tax reform in the interests of business on the British model.

Chancellor Gerhard Schröder has reportedly already decided to put the tax reform on ice. At present it is due to be voted by the German parliament next Friday.